A report from Stack Funds indicates that the share of MVRV is holding steady in its upward trend of the past two years, supported by new all-time highs.
Bitcoin (BTC) has support to go up to $15,000 if historical trends repeat this year, says a new report.
Compiled by cryptomoney index fund provider Stack Funds on October 15, the report highlights Bitcoin’s market capitalisation versus the realised capitalisation rate (MVRV) that fuels the gains, which could crush the $12,000 resistance.
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The report expects a „significant break“ in MVRV
Bitcoin has yet to attempt a $12,000 breakthrough, with a rejection of $11,700 this week. This has failed to dampen optimism among analysts, who believe that $11,000 will provide solid support.
However, going forward, the post US election period in early November may result in further gains.
For accumulated funds, this depends on the MVRV ratio. This is currently at 1.8, with signs that a new test of 2.5 is in play since 2019, when the BTC/USD reached $13,800.
„The current MVRV ratio is at 1.8, and is supposedly well Bitcoin Cycle supported by the trend line where Bitcoin bottomed out in late 2018. The trend is also painting a similar trajectory to the 2017 bull run, with a steady growth slope that proved an identical support trend line several times over,“ the report states.
„Given the strength of support, we expect a significant break of 2.0 in the short term, as it seeks to re-test the 2019 peak at 2.5, which will put the price of Bitcoin above the $15,000 level.
MVRV is a metric devised by analysts Murad Mahmudov and David Puell, also creator of Bitcoin’s Puell Multiple. It uses market capitalisation versus realised capitalisation, the latter created by CoinMetrics, and designed to provide a more accurate valuation of Bitcoin than traditional market capitalisation.
Since late 2018, MVRV has been on a broad upward trend, interrupted only by the fall in the price of coronavirus-crossed assets in March 2020.
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Bitcoin MVRV ratio highlighting uptrend
Bitcoin MVRV ratio highlighting the upward trend. Source: Stack Funds / CoinMetrics
Corporate buyers boost sentiment
Stack also pointed to the growing institutional interest in Bitcoin as reinforcing the idea that the future is firmly optimistic for price action.
Stone Ridge invested $115 million following the $50 million purchase of Square, and both gained publicity from MicroStrategy’s increased cash investment of $425 million.
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As Cointelegraph noted, Bitcoin’s open futures interest is also increasing this month, indicating that institutional activity is once again picking up.
„In addition, we see a repositioning in the market with a possible change in the economic climate, as futures volumes and open interest are beginning to recover,“ Stack’s report explained.
„Our eyes are wide open at the key resistance level of $12,000, as we expect further consolidation around current levels ahead of the election before going bullish in the future“.